Thomas Fuller | Lightrocket | Getty Images
ParamountSkydanceis eyeing a prominent hedge fund manager and investor inWarner Bros Discoveryto run for a seat on the media company’s board to try and scuttle its proposed tie-up withNetflix.
Paramountis holding discussions withMatthew Halbower, the founder ofPentwater Capital Management, to be a potential director-candidate later this year if the company pursues a board fight at Warner Bros, he confirmed to Reuters.
Pentwater is the seventh-largest investor in Warner Bros with about 50 million shares.
News that Halbower, who has expressed support forParamount’sbid to buy Warner Bros, might be a candidate was first reported by the Financial Times.
It also signals a further escalation of tensions after another hedge fund,Ancora Holdings, which said it has established a position in Warner Bros, voiced disapproval of theNetflixdeal and might run its own proxy contest.
Halbower said that neither he norParamounthas made a final decision on his appointment.
“I want the board of Warner Bros to exercise their fiduciary duties and negotiate withParamount,” he said in an interview. “If they’re exercising their fiduciary responsibilities, then there’s no need for me to go on the board.”
The FT report had said thatParamountis planning to nominate enough directors to overturn a majority of Warner Bros’ 14-person board. The list of nominees was still being drafted.
ParamountSkydancedeclined to comment, while Warner Bros andNetflixdid not immediately respond to Reuters’ requests for comment.
Halbower had in January told Warner Bros ChairmanSamuel DiPiazzain a letter that the board “breached its fiduciary duty” to shareholders by rejectingParamount’soffer out of hand, saying it was a better deal and had a better chance of clearing regulatory scrutiny.
He wrote that ifParamountdoes eventually further improve its$30-per-share offer, the Warner Bros board should at least talk with the suitor, or his firm will not support any Warner Bros directors at their next election.
Since then,Paramounthas sweetened its bid by offering Warner Bros investors about$650 millionin extra cash for each quarter the deal fails to close after this year and agreeing to cover the$2.8 billionbreakup fee theHBOowner would oweNetflixif it walked away.
Netflixhas offered to pay Warner Bros shareholders$27.75per share in cash for the film and television studios, the extensive library and its HBO Max streaming service, instead of a mix of cash and stock.
About The Author
